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The lingering impact of the pandemic and the worst inflation in 40 years has led to an alarming increase in craft brewery closures in the UK.
And now analysts are also citing “oversaturation.”
Forty-five UK craft breweries have failed in the twelve months up until March 31, compared to 15 the previous year, according to Mazars, an audit, tax and advisory firm in the United Kingdom
And that number had jumped significantly compared to the prior year in an analysis of the most recent official Insolvency Service statistics that was conducted by the company
On January 20th the UK’s award-winning Bad Seed Brewery announced its closure via twitter citing the economic impact of the Covid pandemic, cost-of-living crisis, and “societal and market changes” as the cause…
“The beer world is very different to when we started in 2013. It has been thrilling to be part of the journey – and hopefully in our own small way, part of the change. But all journeys must come to an end.”
Mazars also attributed the closures to primarily smaller craft breweries that had struggled to stay afloat “an oversaturated market”.
Even without the ongoing cost-of-living crisis there would have been “a major shakeout in the market,” Mazars maintained. “The rise in craft brewery start-ups has meant there was a surplus of breweries competing for limited shelf space in supermarkets and bar space within pubs and restaurants.”
“Craft breweries have been struggling for some time but rising prices have brought their financial challenges to a head.” Paul Maloney, associate director at Mazars, told Just Drinks
The report also explained that smaller craft brewers have been confronted with a change in consumer spending when it comes to beer with the cost-of-living in the UK rising.
“Craft brewers often offer ‘premium’ beers, but consumers are turning to cheaper options,” said Maloney
“The craft beer market became heavily overpopulated over the last decade. The cost-of-living crisis now means many of these brewers are fighting for a place in a shrinking market. Some of them will not make it.”
